2019 IIAR State of the Industry Report

state

2019

OF THE industry 2ND EDITION JANUARY 2019

CONTRIBUTORS Special thanks to all those who contributed to the 2019 State of the Industry Report.

Stephanie Smith, PE – Risk Management Professionals Werner Paulus – Refrigeration Design & Service Inc. Beth Fox – EVAPCO Kristen De La Pena – GCAP, LLC (Garden City Ammonia Program) Clark Jackson – Nestle Eileen McKeown – IIAR Tom Melotik – Emerson Yesenia Rector – IIAR

AGENCY REPRESENTATIVES Greg Bazley – EPA Region 9 Joe Beth Cholmondeley – OSHA Kansas City, MO Regional Office

state

OF THE industry 2ND EDITION JANUARY 2019

TABLE OF CONTENTS 2 | Abstract 3 | Industrial Background: A 30-Year History 4 | Industry Composition 5 | Inspections 5 | USEPA National Response Center (NRC) Release Data 8 | OSHA Violations Data 12 | Regulatory and Standards Update 14 | Chemical Facility Anti-Terrorism Standards (CFATS) Program 15 | Low-Charge and No-Charge Ammonia Systems 17 | Other Natural Refrigerants 18 | IIAR and Its International Reach 18 | IIAR Standards Briefing 19 | Where is the Industry Headed?

20 | References 21 | Survey Results

LIST OF FIGURES 4 | Figure 1: IIAR Membership by Category 6 | Figure 2: 2012 to 2017 USEPA NRC Data – Ammonia Reportable Incidents 6 | Figure 3: 2012 to 2017 USEPA NRC Data – All Reportable Incidents 7 | Figure 4: 2012 to 2017 USEPA NRC Data – Ammonia Incidents by Discharger Type 7 | Figure 5: 2012 to 2017 USEPA NRC Data – Ammonia Incidents by Incident Cause 9 | Figure 6: 2012 to 2017 OSHA Violations by PSM Element 10 | Figure 7: 2012 to 2017 OSHA Violation Penalties by PSM Element 11 | Figure 8: 2012 to 2017 Annual OSHA Violations

1

2

abstract This report is provided to compile information about the ammonia industry and significant topics related to the industry and its global function. Inside are details about the industry specifically related to the use of ammonia as a refrigerant, as well as information regarding other refrigerants emerging on the current market. How important is it to be compliant and informed on the latest regulations and standards? It contains facts about the uses of ammonia and data reported to the EPA and OSHA related to safety, inspections, incident reporting and violations. The EPA and OSHA information allow facilities to compare their performance to publicly available information both for the industry and for all industries tracked by these agencies. The report also contains updates on the international reach of IIAR, where the industry is headed, and which natural refrigerants are utilized more compared to past years.

state

OF THE industry 2ND EDITION JANUARY 2019

industry background: A 30-YEAR HISTORY While standards and regulations continue to change the manner in which natural refrigerants are regulated and stored, the Bhopal incident in 1984 was the real driver behind a renewed sense of safety culture established by private organizations, public regulatory entities, and the general public. Over the last 30 years, a worldwide push for safer operations and greater transparency of process safety has become the norm for business. Newer technologies have helped processes become more efficient, require fewer or reduced inventory of hazardous chemicals, and provide additional safety for personnel and communities surrounding these facilities.

Regulatory programs have impacted process safety and business. The Occupational Health and Safety Administration’s (OSHA’s) efforts in their Process Safety Management (PSM) and the United States Environmental Protection Agency’s (US EPA’s) Risk Management Plan (RMP) Programs are prime examples of the impact of hazardous incidents on the regulatory community. While the PSM Program aims to protect personnel on-site, the RMP Program is intended to protect the environment and community surrounding the facilities utilizing highly hazardous chemicals, as listed in each regulation. While arguments exist for and against regulations, it has undoubtedly made an impact on the safe operations of systems regulated under these programs. The business culture surrounding these facilities has also changed to take a more proactive and preventative approach to operations and maintenance.

More recently, natural refrigerants lead the industry as the most sought after refrigerants.

They have low Ozone Depletion Potential (ODPs) and Global Warming Potential (GWPs), which makes them environmentally compatible by most standards. In addition, natural refrigerants are becoming more popular as users adapt to ever-changing environmental laws and safer operations of refrigeration systems. The 2019 IIAR Green Paper presents a comparison of refrigerants and benefits of using natural refrigerants.

3

4

industry composition The industrial refrigeration industry is diverse. IIAR has over 3,300 members from over 50 countries around the world. Alliance organizations in Asia Pacific, Europe, Latin America, and North America make the international outreach very successful. Members of IIAR include design engineers, end users, contractors, students, scientists, and trainers.

The chart below shows the distribution of members within IIAR, not included are employees of IIAR and honorary life members. The data below illustrates that end users, contractors, and manufacturers make up 65% of the organization membership.

FIGURE MEMBERSHIP

BY CATEGORY Figure1: 1: IIAR IIAR Membership

by Category Retired Manufacturer Rep

Student

Other

Manufacturer

Engineer

Wholesaler

Affiliate International

Affiliate Academic International Organization Contractor

End User

Inspections The Occupational Safety and Health Administration (OSHA) and the United States Environmental

state

Protection Agency (USEPA) are responsible for the inspections of regulated facilities within their Process

based on the North American Industry Classification System (NAICS) code, which is related to industry OF THEgenerally the type of industry. General Duty Clause, Recognized and Generally Accepted Good Engineering Safety Management (PSM) and Risk Management Plan (RMP) Programs, respectively. Inspections are

2ND EDITION JANUARY 2019

Practices (RAGAGEP), Respiratory Protection, and Lockout / Tagout programs are also subject to

inspections The Occupational Safety and Health Administration (OSHA) and the United States Environmental Protection Agency (USEPA) are responsible for the inspections of regulated facilities within their Process Safety Management (PSM) and Risk Management Plan (RMP) Programs, respectively. Inspections are generally based on the North American Industry Classification System (NAICS) code, which is related to the type of industry. General Duty Clause, Recognized and Generally Accepted Good Engineering Practices (RAGAGEP), Respiratory Protection, and Lockout/Tagout programs are also subject to inspections by one or both agencies.

USEPA National Response Center (NRC) Release Data Release data was examined from the USEPA National Response Center (NRC) where reporting data was acquired for analysis on trends with reportable releases. The USEPA NRC is the designated federal contact point for reporting various discharges to the environment in the United States and its territories. The reporting threshold for ammonia releases is 100 pounds. This report presents USEPA NRC data from 2012 through 2017.

Data was acquired from the Right-To-Know (RTK) Network NRC reporting database (Right To Know Network, 2017) and with assistance from USEPA Region 9 contributors.

Figures 2 and 3 compare 2012 to 2017 incidents specifically reported for ammonia releases and incidents reported for all chemicals, respectively. Overall, national incidents have been on the decline. Ammonia incidents have declined 5% from 2012 to 2017, while all incidents for all chemicals have decreased by 14%. While the reasons behind the decline in reportable incidents is not studied, it is reasonable to assume that increased awareness of safety concerns, increased inspections by regulatory agencies, and technological advances to design inherently safer systems all have contributions to the decline in reportable incidents.

5

Figures 2 and 3 compare 2012 to 2017 incidents specifically reported for ammonia releases and incidents reported for all chemicals, respectively. Overall, national incidents have been on the decline. Ammonia

6

incidents have declined 5% from 2012 to 2017, while all incidents for all chemicals have decreased by 14%. While the reasons behind the decline in reportable incidents is not studied, it is reasonable to assume that increased awareness of safety concerns, increased inspections by regulatory agencies, and technological advances to design inherently safer systems all have contributions to the decline in reportable incidents.

FIGURE 2: 2012 TO 2017 USEPA NRC DATA – Figure 2: 2012 to 2017 USEPA NRC Data – Ammonia Reportable Incidents AMMONIA REPORTABLE INCIDENTS 30 24

25

24

21

20

20

20

14

15 10 5 0

2012

2013

2014

2015

2016

2017

FIGURE 3: 2012 TO 2017 USEPA NRC DATA – Figure 3: 2012 to 2017 USEPA NRC Data – All Reportable Incidents ALL REPORTABLE INCIDENTS 35,000 30,000

28,590

29,168

28,503

26,915

25,000

24,189

24,447

2016

2017

20,000 15,000 10,000 5,000 -

2012

2013

2014

2015

There was a total of 124 reported incidents for ammonia from 2012 to 2017. Figure 4 below demonstrates the breakdown by discharger type acquired from the RTK Network. Private enterprise accounts for 87% of the incidents in that timeframe, while public utilities accounted for less than 1%. This percentage has

4

state

remained generally unchanged in recent historical data and can be simply correlated to the fact that

refrigeration systems and other ammonia uses are primarily private entities.

Figure 5,industry the NRC data shows that the highest occurrence of incidents are caused by “other” causes OF InTHE 2ND EDITION JANUARY 2019

(49%), equipment failures (28%), and “unknown” causes (17%). These causes make up a total of 94% of the ammonia incidents reported by the NRC. While the majority of incidents were reported ambiguously,

Figure 4: 2012 to 2017 USEPA NRC Data – Ammonia Incidents by Discharger Type There was a total of 124 reported incidents for ammonia from 2012 to 2017. Figure 4 below demonstrates

Figure 4: 2012 to 2017 USEPA N

FIGURE 4: 2012 TO 2017 USEPA NRC DATA – AMMONIA INCIDENTS BY DISCHARGER TYPE

the breakdown by discharger type

2%

PRIVATE acquired from the RTK ENTERPRISE Network.

1%

Private enterprise accounts for 87%

PRIVATE ENTERPRISE

2%

UNKNOWN / BLANK

UNKNOWN / BLANK

of the incidents in that timeframe,

8%

PRIVATE CITIZEN while public utilities accounted for

PRIVATE CITIZEN

less than 1%. This percentage has

PUBLIC UTILITY

PUBLIC UTILITY

remained generally unchanged in

OTHER / N/A

N/A can recent historicalOTHER data /and

be simply correlated to the fact

GOVERNMENT (local / state / federal)

GOVERNMENT (local / state / federal)

that refrigeration systems and

MILITARY

other ammonia MILITARY uses are primarily

POLICE DEPARTMENT

private entities. POLICE DEPARTMENT

FIRE DEPARTMENT

87%

In Figure 5, the FIRE NRC data shows that DEPARTMENT

the highest occurrence of incidents gure 5: 2012 to 2017 USEPA NRC Ammonia Incidents are caused by – causes (49%),by gure 5: 2012 to 2017 USEPA NRC Data Data –“other” Ammonia Incidents

by Incident Incident Cause Cause FIGUREFigure 5: 2012 2017 USEPA NRC– Ammonia DATA Incidents by Inci 5: 2012TO to 2017 USEPA NRC Data equipment failures (28%), and “unknown” causes (17%). These causes make up a total of 94% of the

EQUIPMENT FAILURE EQUIPMENT FAILURE

1% 1% 2% 1% ammonia incidents reported by the 1% 2% 2% NRC. While the majority of incidents 2%

UNKNOWN UNKNOWN

were reported ambiguously, 28% of

OPERATOR ERROR OPERATOR ERROR

1% 2%

OTHER OTHER

VESSEL SINKING VESSEL SINKING

failure. The specific reasons are not

OVER PRESSURING OVER PRESSURING

recorded, but it is reasonable that

NATURAL PHENOMENON NATURAL PHENOMENON (Hurricane, tornado, flood, earthquake) (Hurricane, tornado, flood, earthquake) DUMPING DUMPING

occurred from at least one of the

TRANSPORT ACCIDENT TRANSPORT ACCIDENT

following causes:

DERAILMENT DERAILMENT

• Lack of preventative maintenance • Aging equipment

17% 17%

• Lack of Management of Change and/or Pre-Startup Safety Review documentation

1% 2%

28% incidents occurred from an equipment 28%

many equipment failures may have 49% 49%

– AMMONIA INCIDENTS BY INCIDENT CAUSE

28%

49%

EXPLOSION EXPLOSION TRESPASSER TRESPASSER

17%

SUICIDE SUICIDE DISORDERLY PASSENGER DISORDERLY PASSENGER AIRCRAFT DIVERSION AIRCRAFT DIVERSION

OSHA Violations Data

• Design incompatibilities SHA Violations Data SHA Violations Data In addition to incident and release data, this report summarizes OSHA violation • Operations outside of addition to incident and release data, this report summarizes OSHA violations data, which was addition to incident and release acceptable data, this report summarizes OSHA violations data, which was by the OSHA Kansas, Missouri Regional Office. Violations are an im provided limits ovided by the OSHA Kansas, Missouri Regional Office. Violations are an important parameter tobecause it provides insight into compliance improvement within the summarize ovided by the OSHA Kansas, Missouri Regional Office. Violations are an important parameter to 6 7 mmarize because it provides insight into compliance improvement within the industry.2017, FromOSHA 2012 to recorded a total of 4,010 violations of the PSM regulations. Initia mmarize because it provides insight into compliance improvement within the industry. From 2012 to 017, OSHA recorded a total of 4,010 violations of the PSM regulations. Initial penaltiesduring are those issuedviolation notification. OSHA allows facilities to negotiate low the initial 017, OSHA recorded a total of 4,010 violations of the PSM regulations. Initial penalties are those issued uring the initial violation notification. OSHA allows facilities to negotiate lower fees for violations

8

OSHA violations data In addition to incident and release data, this report summarizes OSHA violations data, which was provided by the OSHA Kansas, Missouri Regional Office. Violations are an important parameter to summarize because it provides insight into compliance improvement within the industry. From 2012 to 2017, OSHA recorded a total of 4,010 violations of the PSM regulations. Initial penalties are those issued during the initial violation notification. OSHA allows facilities to negotiate lower fees for violations during informal conference. The agreed upon penalty after informal conference is referred to as the “current penalty.” During this time period, initial penalties were reported as $20.7 million.

Of the total violations, 927 were for 1910.119(j) – Mechanical Integrity (MI) and another 896 violations were for 1910.119(d) – Process Safety Information (PSI). Figure 6 below illustrates the distribution of the number of violations from 2012 to 2017 by PSM element.

What that data may demonstrate is that there are a great number of facilities that may not be properly maintaining their systems and documentation for Mechanical Integrity and Process Safety Information. In a presentation to the Global Cold Chain Alliance, OSHA reported that the top three (3) sub-section violations occurred in RAGAGEP compliance, equipment deficiencies, and written Mechanical Integrity procedures. In addition, 613 violations under section 1910.119(e) – Process Hazard Analysis and 589 violations under section 1910.119(f) – Operating Procedures were reported.

The 2017 OSHA data also provides some additional insight, as the data was broken down to further detail within each section. The highest number of violations in a single subsection (29 violations) were under 1910.119(j)(2), which requires written procedures for MI. Under the PSI section, the highest number of violations (28 violations) were under 1910.119(d)(3)(ii), which requires facilities to document that the facility’s equipment meets RAGAGEP compliance. More data on other sections is available from OSHA.

state

OF THE industry 2ND EDITION JANUARY 2019

section section 1910.119(e) 1910.119(e) – Process – Process Hazard Hazard Analysis Analysis andand 589589 violations violations under under section section 1910.119(f) 1910.119(f) – Operating – Operating Procedures Procedures were were reported. reported.

TheThe 2017 2017 OSHA OSHA datadata alsoalso provides provides some some additional additional insight, insight, as the as the datadata waswas broken broken down down to further to further detail detail within within each each section. section.

TheThe highest highest number number of violations of violations in ainsingle a single subsection subsection (29(29 violations) violations) were were under under 1910.119(j)(2), 1910.119(j)(2), which which requires requires written written procedures procedures for for MI.MI. Under Under the the PSIPSI section, section, the the highest highest number number of of violations violations (28(28 violations) violations) were were under under 1910.119(d)(3)(ii), 1910.119(d)(3)(ii), which which requires requires facilities facilities to document to document thatthat the the facility’s facility’s equipment equipment meets meets RAGAGEP RAGAGEP compliance. compliance.

More More datadata on other on other sections sections is available is available from from OSHA. OSHA.

Figure Figure 6: 2012 6: 2012 to 2017 to 2017 OSHA OSHA Violations Violations by by PSM PSM Element ElementBY PSM ELEMENT FIGURE 6: 2012 TO 2017 OSHA VIOLATIONS 38 3819 19 1 1

1910.119(j) 1910.119(j) MI MI

68 68 98 98 74 74 151151

1910.119(d) 1910.119(d) PSI PSI 1910.119(f) 1910.119(f) OP OP 1910.119(e) 1910.119(e) PHAPHA 1910.119(l) 1910.119(l) MOCMOC 1910.119(h) 1910.119(h) CONCON 1910.119(o) 1910.119(o) CA CA

156156

927927

138138

242242

1910.119(g) 1910.119(g) TRNTRN 1910.119(m) 1910.119(m) II II 1910.119(n) 1910.119(n) EP&R EP&R 1910.119(c) 1910.119(c) EP EP

613613 896896

1910.119(i) 1910.119(i) PSSRPSSR 1910.119(k) 1910.119(k) HWP HWP 1910.119(p) 1910.119(p) TS TS

589589

This This correlation correlation is also is also present present in the in the monetary monetary amounts amounts for for current current penalties. penalties.

In the In the five-year five-year time time period, period, This is also present in the amounts forfrom current penalties. the over over half half ofcorrelation the of the total total monetary monetary amounts amounts formonetary for violations violations came came from 1910.119(j) 1910.119(j) – Mechanical – InMechanical Integrity Integrity five-year time period, over half of the total monetary amounts for violations came from

($5.3 ($5.3 million) million) andand 1910.119(d) 1910.119(d) – Process – Process Safety Safety Information Information ($4.7 ($4.7 million). million).

Figure Figure 7 demonstrates 7 demonstrates the the 1910.119(j) – Mechanical Integrity ($5.3 million) and 1910.119(d) – Process Safety

distribution distribution of penalties of penalties over over each each PSM PSM element. element.

Information ($4.7 million). Figure 7 demonstrates the distribution of penalties over each PSM element.

8 8

9

10

FIGURE 7: 2012 TO 2017 OSHA VIOLATION PENALTIES BY PSM ELEMENT Figure 7: 2012 to 2017 OSHA Violation Penalties by PSM Element $6,000,000

$5,000,000

$4,000,000

$3,000,000

$2,000,000

$1,000,000 $-

Figure 8, below, illustrates the total violations broken down annually. It is important to note that the number of violations can greatly differ depending on the availability of inspectors and how many inspections are conducted in a single year. In the last five years, 2013 had more violations than any other year and an increase in violations occurred between 2015 and 2016, which may correlate to OSHA’s National Emphasis Program (NEP) and directive CPL 03-00-021 for inspecting facilities under the PSM Program (Directorate of Enforcement Programs, 2017). Although the directive did not take effect until January 2017, it is possible that OSHA inspectors initiated their efforts earlier than the directive.

state

OF THE industry 2ND EDITION JANUARY 2019

9

Figure 8, below, illustrates the total violations broken down annually.

It is important to note that the number of violations can greatly differ depending on the availability of inspectors and how many inspections are conducted in a single year.

In the last five years, 2013 had more violations than any other year and an increase in violations occurred between 2015 and 2016, which may correlate to OSHA’s National Emphasis Program (NEP) and directive CPL 03-00-021 for inspecting facilities under the PSM Program (Directorate of Enforcement Programs, 2017). Although the directive did not take effect until January 2017, it is possible that OSHA inspectors initiated their efforts earlier than the directive.

Figure 8: 2012 to 2017 TO Annual OSHA Violations OSHA VIOLATIONS FIGURE 8: 2012 2017 ANNUAL 1200

1000

800

600

400

200

0

2012

2013

2014

2015

2016

2017

Data from January through August 2018 shows that 267 violations occurred in eight (8) months and initiated $1.9January million in initial penalties.

This is shows equivalent approximately of the 2017 violations Data from through August 2018 thatto267 violations72% occurred in eight (8) and approximately 63% $1.9 of the initial from 2017. This is equivalent to approximately months and initiated millionpenalties in initial penalties.

72% of theand 2017 violations and approximately 63% of the initial penalties from 2017.

Regulatory Standards Update In 2013, Executive Order (EO) 13650 (The White House, 2013) was signed by President Barak Obama requiring interagency cooperation to enhance and improve the safety and security of chemical facilities.

Since the EO 13650 was signed, the USEPA and OSHA have initiated several updated regulations in regards to the Risk Management Plan (RMP) and PSM Programs. On April 3, 2017, the USEPA issued a proposed rule with additional requirements for regulated facilities above the thresholds listed in the RMP regulation. The new RMP Rule promulgation was then postponed until February 19, 2019. On August 17, 2018, the U.S. Court of Appeals vacated the delay on the new RMP Rule and immediately promulgated several requirements. The new RMP Rule updates requirements for Program 2 and Program 3 facilities with highly hazardous chemical thresholds above the established limits. A summary

11

12

regulatory and standards update In 2013, Executive Order (EO) 13650 (The White House, 2013) was signed by President Barak Obama requiring interagency cooperation to enhance and improve the safety and security of chemical facilities. Since the EO 13650 was signed, the USEPA and OSHA have initiated several updated regulations in regards to the Risk Management Plan (RMP) and PSM Programs. On April 3, 2017, the USEPA issued a proposed rule with additional requirements for regulated facilities above the thresholds listed in the RMP regulation. The new RMP Rule promulgation was then postponed until February 19, 2019. On August 17, 2018, the U.S. Court of Appeals vacated the delay on the new RMP Rule and immediately promulgated several requirements. The new RMP Rule updates requirements for Program 2 and Program 3 facilities with highly hazardous chemical thresholds above the established limits. A summary of the new requirements are as follows.

Emergency response coordination between the facility and local responders is required annually, regardless of what type of emergency preparedness plan is selected. Local responders must be provided a copy of the Emergency Response Plan, updated emergency contact information, and other information deemed relevant by the local responder for emergency response. Field and table top exercises are due by March 15, 2021 per ยง68.96(b).

New general program requirements include providing copies of SDSs, rather than MSDSs, as part of the RMP Program documentation; completing a Compliance Audit for every covered process triennially, and that supervisors shall be trained as least as much as the personnel they manage. In addition, findings from incident investigations must be included in the Hazard Review or Process Hazard Analysis conducted every 5 years, and incident investigation reports are due within 12 months of the incident, unless otherwise approved

state

OF THE industry 2ND EDITION JANUARY 2019

by the regulator. Specific content for the incident investigation reports has been outlined in §68.60. §68.210(a) was updated for public information disclosure.

In addition, by March 21, 2021 all regulated facilities are required to meet the 3rd party Compliance Audit provisions in §68.58(f) – (h), §68.59, §68.79(f) – (h) and §68.80. Root cause analysis provisions shall be met and are listed in §68.60(d)(7) and §68.81(d)(7).

Safer technology analysis will be conducted in accordance with §68.67(c)(8). When an incident does occur, the facility will provide information to the public and conduct a public meeting per §68.210(b) – (e).

Recognized and generally accepted good engineering practices (RAGAGEP) continues to be a source of concern for facilities and regulators alike, not knowing exactly what RAGAGEP entails. The release of IIAR Standard 9 to address minimum safety standards for ammonia refrigeration is anticipated in 2019. IIAR Standard 9 should be able to provide a guide for RAGAGEP compliance for the industry. The most important item to note from the standard is, once effective, a RAGAGEP Evaluation will be required during the next Hazard Review or Process Hazard Analysis.

SB 1013, the “California Cooling Act (CCA)”, was passed by California legislature on August 30, 2018. The bill authorized financial incentives for low-Global Warming Potential (GWP) refrigeration systems, likely in an effort to phase out ozone-depleting synthetic refrigerants. The bill preserved the original EPA deadlines to eliminate HFCs and provided $20 million in incentives. The bill became effective January 1, 2019.

13

14

Chemical Facility Anti-Terrorism Standards (CFATS) Program Since October 2015, representatives from various committees in IIAR have been in discussions with the Department of Homeland Security (DHS) regarding the necessity for anhydrous ammonia to remain on the DHS CFATS Chemicals of Interest list. The purpose of the program is to examine the need for security in using anhydrous ammonia under certain applications and particular areas of the country. DHS argues that if a chemical is found to pose a risk to human life or health, it should be evaluated for the need to conduct a Security Vulnerability Assessment (SVA).

IIAR has taken the stance, along with much of industry and other groups, that facilities utilizing ammonia as a closed-loop system should not be subject to this review and potentially an SVA. Since quantities above the threshold limit through EPA and OSHA are covered under different regulations, IIAR argues that the effort by the DHS is redundant; not to mention that no known uses for anhydrous ammonia in closed-loop systems have required an SVA. IIAR remains positive in its efforts to work with both government agencies and private industry in order to find a solution to meet everyone’s needs.

On October 30, 2018, the DHS released a new industry-specific fact sheet for Food Manufacturing and is available through the CFATS Knowledge Center. The new CFATS Outreach Implementation Plan: Fiscal Year 2019 was made available on December 12, 2018.

state

OF THE industry 2ND EDITION JANUARY 2019

low-charge and no-charge ammonia systems The refrigeration industry continues to change and evolve, much like other technical industries. The phase out of R-22 and other HFCs has led to the introduction of low charge, no charge, and packaged systems. While natural refrigerants have gained popularity with these changes, there are some newer synthetics on the market-albeit at potentially higher cost, higher GWP, and increased flammability.

Low charge systems are very popular due to their physical size and their ability to work effectively and stay under most regulatory threshold limits. Smaller systems allow the packages to be placed on rooftops, away from the public, and saving space inside the facility allowing more “revenue space� to be utilized. In addition, smaller inventories are used and can be combined with secondary coolants (i.e., CO2, glycol, air, water, etc.), as well as have a more positive public appearance.

Low-charge systems utilize smaller inventories of ammonia. When combined with a secondary coolant, the variety of uses for these systems changes dramatically. Ammonia can be used with secondary coolants for more efficient office building or retail ventilation systems. Supporters of these uses argue that the general public does not fully understand the pros and cons of ammonia, thus slowing down the utilization due to fear of the chemical itself. Another challenge is the potential for a high capital investment. Even at an office or retail level, there may be high costs in installing new equipment, and hiring trained contractors and service technicians. Packaged systems are helping with this dilemma because they are more economical to install and, as they become more popular, will be more readily available on the market.

In 2018, industry magazines and articles have been flooded with information regarding low-charge, no charge, and transcritical refrigeration systems. An article by shecco (Gary, 2018) on July 30, 2018, noted that the grocery store chain, Aldi, had installed 130

15

16

transcritical systems in retail stores throughout the United States. It was the most systems to-date installed by any food retailer and the company states that their long-term strategy was to standardize all stores to transcritical systems. Additionally, transcritical grocery stores are opening in Australia, China, Philippines, and Russia; there is even one (1) cruise line that has opted to utilize transcritical on their cruise ships. The Mediterranean Shipping Company has also opted to use CO2 shipping containers to transport goods.

IIAR finalized its Low Charge Ammonia Refrigeration Management (ARM-LC) Summary Guide and Guidelines for end users required to meet minimum safety and regulatory compliance for systems with 500 pounds or less of ammonia. ARM-LC provides guidance on how to meet regulatory requirements and appropriately address elements needed to maintain a safe system. The intention is that this guidance will assist facilities in meeting General Duty Clause requirements.

With all this change, it is surprising to read that concerns still mostly revolve around the safety of ammonia. Given the violations listed above, ammonia is still one of the safest industries in the United States and some would state that the safety concerns mostly revolve around the fact that ammonia and its uses are still misunderstood. Many will agree that more outreach is needed to educate the general public about the benefits of natural refrigerants, especially ammonia, and the industry-wide safety culture that surrounds these substances.

While the technology for low-charge systems is still young, many argue that these systems are more efficient than larger systems. More data and study is needed, but with an emerging technology the estimates of payback on investments are up to 7 years. In addition, the applications are almost limitless. In addition to office buildings and retail, combined systems can also provide central cooling to an entire facility, not just cooling rooms.

state

OF THE industry 2ND EDITION JANUARY 2019

other natural refrigerants The USEPA raised limits for isobutane (R600a), propane (R290), and R441A (hydrocarbon blend) as specified below. This introduces new possibilities in the use for these natural refrigerants, including domestic use in household appliances. All three (3) refrigerants are classified as A3 refrigerants. With the phase-out of HFCs, this introduces additional options for the refrigerant markets.

Refrigerant

Old Limit

New Limit

Isobutane (R600a)

57 g

150 g

Propane (R290)

57 g

150 g

R441A (hydrocarbon blend)

57 g

150 g

(Effective 9/7/2018)

17

18

IIAR and its international reach Over the last several years, IIAR has increased its efforts to reach across the globe to collaborate and educate. In 2018, IIAR had active chapters in Argentina, Chile, Columbia, Costa Rica, Ecuador, Mexico, Peru, and other parts of Central America. In addition, IIAR is in the process of establishing chapters in Brazil, Paraguay, Spain, and Uruguay. IIAR is currently in discussions with India and other countries in Europe to establish chapters, and Chile is making efforts to establish a Masters degree program in refrigeration at its largest university.

Chile is in the final stages of publishing a country-wide ammonia standard that was written in cooperation with the Chilean refrigeration and air-conditioning association (CCRHYC) and Highland Refrigeration (McLaughlin, 2018).

IIAR standards briefing 2018 was a monumental year for the Standards Committee as IIAR 9 and IIAR 6 are almost complete and are proceeding through the final stages of ANSI approval. Both standards are estimated to be finalized in the first half of 2019. A standard for CO2 has been approved for Public Review and is anticipated for publication in 2020. The next phase for the committee is to start discussions regarding hydrocarbons for commercial and industrial applications. The Standards Committee intends to follow a similar format to the standards established for ammonia.

state

OF THE industry 2ND EDITION JANUARY 2019

where is the industry headed?

There are many challenges that face the industrial refrigeration industry in the future.

Emerging regulations surrounding refrigerants, including changes to the USEPA and OSHA programs and California’s Refrigerant Management Program, may initiate further complications in reporting and the usage of alternative refrigerants.

With the phase-out of HFCs and the push for reduced amounts of high-Global Warming Potential (GWP) refrigerants, end-users are in a situation where they must decide which regulations they will choose to be governed by, rather than if they can remove their facility from under a regulatory agency by restricting their inventory or using alternative refrigerants.

More encouraging, however, are the advances within the industry utilizing newer technologies and refrigerants as alternatives to ammonia. For example, many facilities have opted to design CO2 and hydrocarbon refrigeration systems, which is a low-GWP refrigerant and very efficient. Even with additional regulations that may surround the use of CO2, this refrigerant is increasingly studied for its sustainability in the industry. Another encouraging technology is low-charge ammonia systems and cascade systems. AmmoniaCO2 and ammonia-glycol systems have been emerging as the new and more efficient methods to utilizing refrigeration. The largest consideration in utilizing any refrigeration system over another is the facility’s needs for loading, operations, and expansion.

The future of IIAR holds some promising potential as it works to establish a worldwide standard for industrial facilities building. Internationally, more countries are following the US and Europe’s lead for safety standards surrounding natural refrigerants and are partnering with US and European resources to do so.

19

20

references Directorate of Enforcement Programs. (2017, January). OSHA Directive CPL 03-00-021.

Retrieved from OSHA: https://www.osha.gov/OshDoc/Directive_pdf/CPL_03-00-021.pdf Gary, M. (2018, July 30). Shecco. R744.com. Retrieved from http://r744. com/articles/8447/aldi_us_up_to_130_stores_with_transcritical_co2?utm_ source=mailchimp&utm_medium=email&utm_campaign=Bi-weekly%20Newsletter Global Cold Chain Alliance. (2017). ChemNEP & Ammonia Refrigeration Enforcement Update.

Right To Know Network. (2017, January 5). NRC Incidents Report Search. Retrieved from Right To Know Network: http://www.rtk.net/erns/search.php The White House. (2013). Executive Order 13650 – Improving Chemical Facility Safety and Security. Washington DC: Office of the press Secretary.

US EPA. (2018, January). Releases of Chemicals in the 2016 TRI National Analysis.

Retrieved from United States Environmental Protection Agency: https://www.epa.gov/ trinationalanalysis

state

OF THE industry 2ND EDITION JANUARY 2019

2018 survey responses When IIAR launched the inaugural State of the Industry Report at the 2018 IIAR Natural Refrigeration Conference & Expo in Colorado Springs, CO, we asked that our members participate in a survey created to serve as a year over year benchmark for our industry.

We appreciate the response we received from our first survey. Although the responses we received were limited in number, we did receive some valuable feedback.

Question 1: For those who have classified reportable incidents to the NRC as “other” or “unknown,” was there more information later to classify it differently? If so, what was the new classification?

All respondents answered this question as non-applicable.

Question 2: What new technologies (cascade systems, low-charge systems, etc.) are end-users actually using and how do they compare to “traditional” ammonia refrigeration systems?

Answers to this question varied. Responses included consideration that low charge does not, in their opinion, fit the refrigeration capacity requirements for industrial facilities.

Others have seen trends in smaller facilities using glycol systems more frequently. Most thought that there was a growing interest in low charge technologies in order to reduce the ammonia quantity to increase safety and reduce regulation.

21

22

Question 3: If the membership could make 1 change/suggestion to the regulatory community, what would you change/suggest?

Out of our five survey questions, this question received the most response. Respondents felt that regulatory inspectors were interpreting codes and standards based on limited understanding when applying them to facility inspections. They felt that partnership with the regulatory community to create and offer training would be a good way to bridge the gap. There was a suggestion for the EPA and DHS to create a common portal to record reportable quantities of ammonia so that the information would not have to be entered twice. One respondent felt that facilities below the current mandatory 10,000 lb reportable quantity should also have to report their ammonia levels. “Dangers to these operators and surrounding communities are at as much risk from a plant with 9,995 lbs as they are from a plant with over 10K.�

Question 4: What is the biggest challenge faced for end-users in the industrial refrigeration industry?

The answer to this question was a resounding lack of qualified refrigeration operators. Key words in all the responses included, training, qualification and skilled personnel.

Question 5: What information would you like to see in future reports?

Respondents identified that they would like to see what sort of educational opportunities or resources were available to help people in the industrial refrigeration field. Best practices from other companies was also identified as a potential benefit to respondents.

We will attempt to address the concerns and questions raised in these responses moving in to our 2020 State of the Industry Report.

state

OF THE industry 2ND EDITION JANUARY 2019

2019 survey questions Based on the response we received for the 2018 survey, we have reworked and expanded our question set for 2019. Again, we would appreciate your input in this year’s survey. Information collected in this survey will be reported in the 2020 IIAR State of the Industry Report.

Question 1: For those who have classified reportable incidents to the NRC as “other” or “unknown,” can you describe the nature of those releases? Why were they not easily classified?

Question 2: What new technologies, other than “traditional” ammonia closed-circuit refrigeration systems, are end-users Implementing in their facilities? (i.e. cascade systems, low-charge systems, CO2 Transcritical etc.)

Question 3: If the membership could make one (1) change or suggestion to the regulatory community, what would that change or suggestion be?

Question 4: What is the biggest challenge end-users face in the industrial refrigeration industry?

Question 5: EPA requires any release of ammonia greater than 100lbs to be reported within 15 minutes of stated release. Have you ever failed to report an ammonia release within 15 minutes because it was not possible to identify the specific quantity within that time? What was the type and dollar value of the citation you received?

Question 6: What information would you like to see in future reports?

To participate in the survey, go to www.iiar.org/iiar/wcm/stateoftheindustry.

Email publications@iiar.org for more information.

23

24

IIAR is the world’s leading advocate for the safe, reliable and efficient use of ammonia and other natural refrigerants. IIAR members share their collective knowledge and experience to produce consensus documents that address various aspects of the natural and industrial refrigeration industry.

IIAR has broad industry representation including manufacturers, design engineers, contractors, end users, academics, scientists, and trainers. IIAR sets the standard for providing advocacy, education and the most up-to-date technical information to the ammonia and natural refrigeration community.

We help professionals develop their skills and further their careers by promoting the common interests of our 3,300 plus members.

OUR VISION AND MISSION Our vision is to create a better world through the safe and sustainable use of natural refrigerants Our mission is to provide advocacy, education, and standards for the benefit of the global community in the safe and sustainable design, installation and operation of ammonia and other natural refrigerant systems.

state

OF THE industry 2ND EDITION JANUARY 2019

The World’s Largest Meeting Dedicated to the Natural Refrigeration Industry!

Visit www.iiar.org/events for more details.